Usable equity is up to 80 per cent of your home’s value minus what you still owe, and it is the figure a lender will release. Enter two numbers and see what it could fund.
Home equity calculator
For upgraders and investors, how much of your home could work as a deposit.
That usable equity could work as a deposit on an investment property or renovation, structured so your properties aren’t tied together unnecessarily.
Usable equity assumes lending to 80% of your home’s value against your current loan. Lender policy and serviceability decide the real figure.
Confirm your numbers.
Usually 80 per cent of the lender’s valuation minus your current loan balance. Your equity on paper is larger, because lenders do not release all of it, and the figure runs on the lender’s valuation rather than a listing site’s estimate.
On a $1,000,000 home with a $400,000 loan that is $400,000 of usable equity, released as a separate loan split for a renovation, an investment deposit or a family guarantee, without mortgage insurance.
Part of the investment property loans guide.
Your sold sign could be next.
A free 30-minute call shows where you stand.
Book my free callCharles and the team recently assisted me with the refinance of my investment property.
Highly recommend Charles! Professional, knowledgeable and very easy to work with. He helped us navigate the home loan process and found a great solution that suited our needs. Excellent service from start to finish.
Had a really good experience with Charles at Links Property Finance. He was easy to deal with, always quick to respond and kept everything simple and clear throughout the whole process. You can tell he genuinely cares about getting the best outcome for his clients rather than just getting things done quickly. Really happy with the experience and would happily recommend Charles and Links Property Finance to anyone.
Home equity is the property’s value minus what you owe. Usable equity is what a lender would release at an 80 per cent loan-to-value ratio: 80 per cent of the value, minus the loan. The calculator above does your own figures.
Borrowing against it, often called an equity loan, usually means increasing your home loan or adding a separate split secured by the home. Spending it on a car spreads the cost over the loan term, as using your home loan to buy a car shows.
| $800,000 | Current loan $400,000. 80% of value $640,000. |
|---|---|
| $800,000 | Current loan $600,000. 80% of value $640,000. |
| $1,000,000 | Current loan $400,000. 80% of value $800,000. |
| $1,000,000 | Current loan $600,000. 80% of value $800,000. |
| $1,200,000 | Current loan $400,000. 80% of value $960,000. |
| $1,200,000 | Current loan $600,000. 80% of value $960,000. |
| $1,500,000 | Current loan $400,000. 80% of value $1,200,000. |
| $1,500,000 | Current loan $600,000. 80% of value $1,200,000. |
Usable equity is the amount a lender will let you borrow against without lenders mortgage insurance: 80 per cent of the valuation less what you already owe. Some lenders go to 90 per cent with LMI. Serviceability still has to cover the larger loan. Equity used for a business has its own rules; see using home equity for a business.
Charles Touma, Mortgage Broker.
Your equity is the property’s value minus what you owe. Usable equity is smaller because most lenders will only lend up to 80 per cent of the value without mortgage insurance, so the usable figure is 80 per cent of value minus your current loan.
The gap between the two numbers surprises people, and it is the one that matters when you are planning.
A renovation through a top-up on the existing loan, the deposit on an investment property as a standalone split that keeps the debts separate, or help for your children as a documented gift or a family guarantee.
Lenders ask the purpose of a cash-out and want evidence for larger amounts, so the use is settled before the application.
No. The released amount is set up as a new split or a top-up alongside your existing loan, with its own rate and term, and your original loan keeps running as it was.
Repayments rise with the extra balance, and an interest-only split is possible for an investment purpose if the lender agrees.
Yes. A top-up or a new loan split releases the money while you keep the home, subject to a valuation and your capacity to service the larger balance. It is the usual way an investment deposit or a renovation is funded, and it avoids selling costs and moving.
Because lenders keep a margin. Most lend to 80 per cent of the valuation without mortgage insurance, and some go higher with the premium added, so part of your equity always stays in the property.
That buffer protects the lender against a fall in value and you against a forced sale.
Yes, and it is the most common use. The released amount, usually a 20 per cent deposit plus costs, sits in its own split secured only by your home, and the investment property carries its own loan, which keeps the two debts separate for tax and for selling later.
With their own valuer, usually a desktop or kerbside assessment for lower loan-to-value ratios and a full inspection for higher ones or larger amounts. The valuation can differ from a listing site’s estimate or a neighbour’s sale, and it is the figure the usable equity is calculated on.
Up to the usable equity figure, provided the larger loan still fits your income. For structural work lenders want approved plans and often fund in stages like a construction loan; for cosmetic work a straight top-up is usual. A quote and a valuation set the amount.
Bring your numbers to a 30‑minute conversation and leave with a borrowing range a lender could stand behind.
Prefer a callback?Charles calls back within one business day. No documents needed yet.
Estimates only, not credit or financial advice. Calculators use general assumptions; lender policy, rates and your own position are confirmed in a full assessment.
